Luck in accumulating money is a common factor that is often used to explain the wealth and poverty of different people. So, one person is lucky - therefore he has a solid state, and the other is poor for the reason that he is simply a failure. But such an explanation is hardly satisfactory to a thoughtful observer, and this is understandable.
In fact, the systematic and systematic buildup of capital occurs for obvious reasons, as is the case with the reverse situation, when a person stably maintains his status as a beggar. The difference lies in the ability to manage money, which is eloquently reflected in the examples of financial management below.
1. A tenth of the budget - in investment
This is a long-term investment that will consistently bear fruit in the future, and in the present it will take away only a small part of the funds that will not affect the well-being of the owner.
It would seem that investment is wonderful, but only if there are those very 10% of regular contributions. But if we are talking about a poor man who counts every penny, where will he get the extra funds? The output will be a complete review of income and expenses in order to optimize them. Studies show that spending management without proper control, in particular, restricts people from using financial instruments, including investing.
2. Invest money
Monthly saving 10% of income, in the coming years, you can create an impressive contribution package that will allow you to make a major purchase over time or simply become a financial safety cushion. The main rule in creating deposits is to use a diversification tool. That is, to make various investments - in the shares of promising companies, in gold, in real estate, etc.
3. Principles of investing
At this stage, it is important to think about what is the basis for managing money in one way or another. What is the source of advice and recommendations? And in this issue lies the fundamental difference between the management of money by rich and poor people. The former listen to different expert opinions, also trying to the extent of knowledge to conduct their own market analysis, fixing important indicators. Poor people are more susceptible to intuitive decisions, they listen to popular opinions, follow the masses and take into account the advice of their close circle. Obviously, in the long run, both approaches will yield completely different results.
4. Knowledge of the sphere of money circulation
Effective financial management is not possible in areas of which the owner of the funds has no idea. In business, this is especially noticeable in the examples of people who open a business without a clear understanding of the market situation, the demands of the target audience, the level of competition, etc. Therefore, a significant portion of beginning entrepreneurs burn out in the first year.
5. The desire for easy money
Another difference between rich and poor people lies in the plane of the attitude to the temptation to get quick money. Financially literate people, in principle, reject any form of dubious earnings. If there is no clear mechanism for generating income, they refuse the proposed scheme, even if its author promises superhigh profits. And on the contrary, such ways of earning are quite readily accepted by many low-income people who follow impulses and emotions. They, for example, are more likely to become victims of scammers and gambling.Successful businessmen act only on the basis of reason, trying to exclude the influence of the emotional background on decisions. In the field of investment, for example, the ability to restrain impulsive actions is extremely important.